Mortgage rates hit multi-week high amid higher inflation, yields

Mortgage rates have soared to their highest level in over a year, driven by a global bond selloff and the Federal Reserve's concern over inflation, according to Freddie Mac data. The average 30-year fixed rate mortgage rose to 6.71% this week, up from 6.66% the previous week. The 10-year Treasury yield has also climbed as investors grow more uncertain about inflation.

Federal Reserve Chairman Kevin Warsh warned of potential rate hikes to curb inflation, with roughly 50-50 odds of a 25-basis-point increase at the Fed's September meeting. Mortgage rates are influenced by the Fed's decisions, but they don't directly control them. Fixed-rate mortgages lock in a rate for the entire loan term, while adjustable-rate mortgages (ARMs) have a fixed rate for an initial period before adjusting based on economic factors.

Mortgage rates depend on controllable factors like credit score, debt-to-income ratio, and down payment, as well as uncontrollable economic conditions.